Glassnode data reveals that the number of validators leaving the Ethereum (ETH) network on a daily basis has reached its lowest point in the past 30 days. This decline can be attributed to a decrease in demand for the Proof-of-Stake (PoS) network. As a result, the ETH burn rate has decreased, leading to an increase in the token’s supply and making it inflationary once again. When ETH becomes inflationary, it may experience significant downward pressure on its price.
Ethereum Network Activity
Over the past month, the value of the token has dropped by 13%, according to CoinMarketCap. This lack of price movement has eliminated the incentive for validators on the Ethereum network to repurchase their stakes for future sales. Typically, when the price of ETH rises, there is an increase in validator exits as validators seek to profit from their staked coins.
With fewer validators leaving the network, the participation rate among validators has reached its highest level in the past month. It is crucial for validators to join the network to ensure optimal operation of Ethereum. A high participation rate indicates reliable uptime for validator nodes, fewer missed blocks, and superior block space efficiency. Currently, the participation rate of validators on the network stands at 99.6%. Last week, ETH saw a 5% increase in value, trading at $3,150. This price increase may be attributed to a slight recovery in bullish sentiment among market participants, as indicated by the cryptocurrency’s basic technical indicators on a daily chart.
Current Data on ETH
At the time of writing, the MACD line of the token was above the signal line. This indicates that ETH’s short-term moving average is higher than its long-term moving average. This is considered a bullish signal, suggesting that long positions should be taken while short positions should be exited. Similarly, the Chaikin Money Flow (CMF), which measures the flow of money into and out of the cryptocurrency market, returned a positive value. This suggests that the ETH market has a stable supply of liquidity.
However, the bearish trend in the market persists. The value of the cryptocurrency’s Elder-Ray Index was -61.96 at the time of writing. This indicator assesses the power dynamics between buyers and sellers in the market. A negative value indicates the dominance of bearish forces in the market. The negative direction index (red), which confirms the strength of ETH bears, was positioned above the positive index. This indicates that there are more cryptocurrency sellers than buyers in the market.
Disclaimer:
The information provided in this article does not constitute investment advice. Investors should be aware that cryptocurrencies are highly volatile and carry inherent risks, and should conduct their own research.
